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FIN8201 Finance for Executives

Semester 1, 2013 On-campus Toowoomba
Units : 1
Faculty or Section : Faculty of Business and Law
School or Department : School of Accounting, Economics and Finance
Version produced : 24 April 2014

Contents on this page

Staffing

Examiner: David Troedson
Moderator: Dom Pensiero

Other requisites

Students are required to have access to a personal computer, e-mail capabilities and Internet access to UConnect. Current details of computer requirements can be found at http://www.usq.edu.au/current-students/support/computing/hardware.

Rationale

Finance and financial decisions are everywhere in our daily lives, whether it be from a personal or business perspective. Fundamental to an understanding of basic financial knowledge is the ability to weigh the relevant costs and benefits of any decision using valuation principles and concepts. Within this framework, an understanding of financial markets and the tools available to properly analyse and assess financial information is needed so as to enable the financial consumer and manager to apply those tools to make properly informed decisions amongst loans, investments, and projects.

Synopsis

This course will introduce students to financial markets, the tools and concepts of basic finance, comprehension of basic financial statements, time value of money, valuation of shares and bonds, risk and return considerations, capital budgeting and the cost of capital. It forms the first of three courses in the Finance stream and as such, should be seen as introducing many of the key concepts and foundations upon which the other two courses are built. Given the far reaching consequences of the Global Financial Crisis of 2007-2009 it is clear that any discussion or examination of finance must incorporate a global perspective. To this extent, the content of the course involves a brief examination of international financial markets and institutions as well as a more detailed examination of the operations of the derivatives market. Similarly, many of the finance concepts studies in this course have a global as well as domestic application. In addition, this course will adopt a decision making focus in the context of finance with the tools and techniques taught in this course enabling businesses to maximise the wealth of owners.

Objectives

On successful completion of this course, students should be able to:

  1. demonstrate an understanding of the decisions that financial managers must make such as capital budgeting and apply relevant financial tools to make better informed decisions
  2. demonstrate an understanding of the major financial intermediaries and the instruments that are traded in financial markets and apply those instruments to relevant business situations
  3. discuss, analyse, evaluate and apply core concepts of financial management, including the time value of money, capital budgeting, risk and return, and the cost of capital
  4. apply the concepts and tools of financial management to the solution of problems that face financial managers
  5. demonstrate numeracy skills required by financial managers through the use and application of financial mathematics, including present value and future value techniques, to solve financial management problems
  6. analyse and communicate financial analysis reports to an audience of stakeholders in a potential project or decision makers
  7. demonstrate an understanding and application of specialised financial derivative markets such as futures and options and how they work.

Topics

Description Weighting(%)
1. An overview of the financial system and markets 5.00
2. Financial statements and financial ratios 15.00
3. Time value of money 15.00
4. Valuation of shares and bonds 10.00
5. Capital budgeting 15.00
6. Risk and return 10.00
7. Cost of capital 15.00
8. An overview of derivatives market 15.00

Text and materials required to be purchased or accessed

ALL textbooks and materials available to be purchased can be sourced from USQ's Online Bookshop (unless otherwise stated). (https://bookshop.usq.edu.au/bookweb/subject.cgi?year=2013&sem=01&subject1=FIN8201)

Please contact us for alternative purchase options from USQ Bookshop. (https://bookshop.usq.edu.au/contact/)

  • Berk, J, DeMarzo, P, Harford, J, Ford, G & Finch, N 2011, Fundamentals of corporate finance, Pearson Education, Frenchs Forest, New South Wales.
    (Chapters 2 – 14 only.)
  • Mishkin, FS & Eakins, SG 2012, Financial markets and institutions, 7th edn, Pearson Education Limited, Edinburg Gate, England.
    (Chapters 1 and 2 only.)
  • Valentine, T, Ford, G, O’Hara, L & Sundmacher, M 2011, Fundamentals of financial markets and institutions in Australia, Pearson, Frenchs Forest, New South Wales.
    (Chapters 10 and 11 only.)
  • FIN8201 Finance for Executives, 2011– compiled for the University of Southern Queensland by Dom Pensiero and Glenda Adkins, Pearson Australia. This custom publication comprises readings from the Berk et al text, Mishkin & Eakins text, and Valentine et al text.
  • Students should note that the custom publication is ONLY available through the USQ Bookshop. If you choose not to purchase the custom publication, you may subsequently find you cannot purchase the individual texts from your local supplier/bookstore or you may find that you will have to purchase the FULL version of each text rather than the substantially cheaper and smaller customised version. Further, as texts can be released in differing editions in different countries, to avoid confusion, the study material is specifically written to the editions of the texts shown above and which are used in the custom publication. In sum, the custom publication is strongly recommended for all students.

Reference materials

Reference materials are materials that, if accessed by students, may improve their knowledge and understanding of the material in the course and enrich their learning experience.
  • Brooks, RM 2010, Financial management: core concepts, Prentice Hall, Boston, Massachusetts.
  • Eiteman, D, Rath, S & Daly, K 2011, Multinational business finance, 2nd Australian edn, Pearson Australia, Frenchs Forest, New South Wales.
  • Kidwell, D, Brimble, M, Basu, A, Lenten, L & Thompson, D 2011, Financial markets, institutions and money, 2nd edn, John Wiley & Sons, Australia.
  • Madura, J 2010, Financial markets and institutions, 9th edn, South-Western Cengage Learning, Mason, Ohio.
  • Parrino, R, Kidwell, DS, Au Yong, HH, Morkel-Kingsbury, N, Dempsey, M & Murray, J 2011, Fundamentals of corporate finance, Australasian edn, John Wiley & Sons, Milton, Queensland.

Assessment details

Description Marks out of Wtg (%) Due Date Notes
CMA TEST 1 10 10 20 Mar 2013 (see note 1)
CMA TEST 2 30 30 13 May 2013 (see note 2)
2-HOUR EXAMINATION 60 60 End S1 (see note 3)

NOTES
  1. CMA test 1 will comprise multiple-choice/true-false questions on first 2 modules. Students will be able to download CMA test 1 from the first teaching week of semester.
  2. CMA test 2 will comprise multiple-choice questions involving detailed problem-solving and critical analysis on modules 3-6. Students will be able to download CMA test 2 approximately three weeks (3) prior to the due date, that is from 15 April 2013.
  3. The examination is scheduled to be held in the end-of-semester examination period and is an open examination. For more information on an open examination, students should read the information provided in the examination section below. Students will be advised of the official examination date after the timetable has been finalised. The format of the exam will be outlined in the student online material.

Important assessment information

  1. Attendance requirements:
    It is the students' responsibility to attend and participate appropriately in all activities (such as lectures, tutorials, laboratories and practical work) scheduled for them, and to study all material provided to them or required to be accessed by them to maximise their chance of meeting the objectives of the course and to be informed of course-related activities and administration.

  2. Requirements for students to complete each assessment item satisfactorily:
    To satisfactorily complete an individual assessment item a student must achieve at least 50% of the marks. (Depending upon the requirements in Statement 4 below, students may not have to satisfactorily complete each assessment item to receive a passing grade in this course.)

  3. Penalties for late submission of required work:
    If students submit assignments after the due date without prior approval of the examiner, then a penalty of 5% of the total marks gained by the student for the assignment may apply for each working day late up to ten working days at which time a mark of zero may be recorded.

  4. Requirements for student to be awarded a passing grade in the course:
    To be assured of receiving a passing grade a student must achieve at least 50% of the total weighted marks available for the course.

  5. Method used to combine assessment results to attain final grade:
    The final grades for students will be assigned on the basis of the aggregate of the weighted marks obtained for each of the summative assessment items in the course.

  6. Examination information:
    This will be an open examination. Candidates may have access to any printed or written material and a calculator during the examination.

  7. Examination period when Deferred/Supplementary examinations will be held:
    Any Deferred or Supplementary examinations for this course will be held during the next examination period.

  8. University Student Policies:
    Students should read the USQ policies: Definitions, Assessment and Student Academic Misconduct to avoid actions which might contravene University policies and practices. These policies can be found at http://policy.usq.edu.au.

Assessment notes

  1. Referencing in assignments: Harvard (AGPS) is the referencing system required in this course. Students should use Harvard (AGPS) style in their assignments to format details of the information sources they have cited in their work. The Harvard (AGPS) style to be used is defined by the USQ Library's referencing guide at http://www.usq.edu.au/library/referencing.

Other requirements

  1. Computer, e-mail and Internet access: Students are required to have access to a personal computer, e-mail capabilities and Internet access to UConnect. Current details of computer requirements can be found at http://www.usq.edu.au/current-students/support/computing/hardware.